BIP-79: Sonic Expansion – Move Treasury Assets to Sonic

Summary

Once Sonic mainnet has launched, move DAO treasury assets off Fantom and provide initial protocol owned liquidity on Sonic.

Proposal

If this proposal passes, any DAO-owned liquidity pool positions on Fantom will be unwound and also migrated away from Fantom. All Fantom-native assets in the Beethoven X DAO’s treasury will be moved and converted to Sonic as soon as public mainnet is live. Any non-Fantom-native assets on Fantom will be bridged to Ethereum Mainnet as soon as public mainnet is live. Treasury will also convert all its Fantom-native BEETS to Sonic-native BEETS.

In addition, we propose to allocate a certain amount of non-fantom-native assets to protocol-owned-liquidity (POL) positions on Sonic. The POL allocation should move in stages and not all at once. We propose to move a first allocation (Stage 0) as soon as Sonic mainnet is live and a second allocation (Stage 1) after four weeks of Sonic mainnet launch. We will follow up with another BIP once Stage 1 movements have concluded to possibly move more assets to Sonic. The pools that we provide POL for on Sonic should resemble their Fantom counterparts.

Protocol Owned Liquidity

Stage 0: Use up to $65,000 worth of USD stable coins, $500,000 worth of $S and $500,000 worth of $BEETS to seed similar pools such as Fantom Menace (sFTMx/FTM), Trio of Stables (lzUSDC, axlUSDC, USDC.e), Circle Staked symphony (sFTMx/USDC.e), Fresh Beets (FTM/BEETS).

Stage 1: Use additionally up to $135,000 worth of USD stable coins and $500,000 of worth of $S to increase liquidity on above pools or re-create pools based on available assets (i.e. when new stables coins become available).

External Markets for the LST

For the growth of our LST, we propose to incentivize liquidity on external DEXes and also allocate POL to those DEXes. The reason for this is that we need volume and liquidity on additional DEXes to get Chainlink Oracle support which is highly important for various integrations of our LST on Sonic.

We are in discussions with several parties but have received a promising proposal from SwapX. We therefore propose to grant the permission to allocate treasury funds to the SwapX DEX. We also propose to allocate up to $50,000 worth of assets as POL to a LST/USD CL pool on SwapX in Stage 0 and an additional $50,000 for Stage 1.

SwapX has agreed to provide an allocation of their veSWPx NFT. We will not own the NFT but have delegated voting power that we can use to vote for our pool. They have also agreed to match any incentives that we will provide for the pool. In addition, they have agreed to an airdrop for our community. The airdrop is mixed between locked veSWPx and vested SWPx. Who is eligible for the airdrop is to be determined by the Music Directors and SwapX and will be communicated at a later date.

Motivations

Initial Protocol-Owned Liquidity for Beethoven X

Providing the initial protocol-owned liquidity is essential for bootstrapping the initial pools on Sonic. This way, we can make sure our core pools have sufficient liquidity, which is essential to Beethoven X from the start.

Staged Approach

As there is always a risk connected to bridging assets to a new blockchain, this proposal is using a staged approach to minimize the risk. While it is essential to have liquidity on Sonic from the beginning, it makes sense not to move all assets to Sonic immediately.

## Impacts / Risk Assessment Moving Treasury assets as proposed entails certain risks connected to bridging to and holding assets on Sonic mainnet. While Sonic has been tested and audited extensively, it is an entirely new blockchain. Since Fantom and Sonic are very tightly coupled, the risk of having the assets on either chain are comparable. However, as we are looking forward, it makes sense to leave Fantom behind and move our treasury to Sonic.

Specification/Execution Plan

If this proposal passes, the above mentioned treasury assets will be moved from Fantom Opera according to the timeline specified above.